The April Employment Report was flawed, reflecting issues with data collection, classification, and methodology. However, results were consistent with an unprecedented, sharp deterioration in labor market conditions, mostly at the lower rungs. Payrolls fell by more than 20 million, nearly erasing the number of jobs gained since the financial crisis. The unemployment rate jumped to 14.7%, but that understated the problem. Correcting for a classification issue, the figure would have been closer to 20%. So many lower-income workers were jettisoned in April, average hourly earnings surged. None of this tells anything about where we’re going. While many are hoping for an economic rebound, recovery will take time and there is going to some permanent job destruction.

Nonfarm payrolls fell by 20.5 million in the initial estimate for April, the largest decline on record, dwarfing the amount of job losses during the financial crisis. Private-sector jobs were down 14.5% from a year earlier. Leisure and hospitality lost 7.65 million in April, down 48% in the last two months (5.49 million of that in restaurants). Manufacturing shed 1.3 million jobs. Construction lost 975,000. Retail jobs fell by 2.1 million. Temp- help payrolls fell by 842,000 (-30.9% y/y). State and local government lost 981,000 jobs, about two-thirds in education (in comparison, we lost about 700,000 state and local government jobs in total during the financial crisis).

In a normal April, we would expect to add around one million jobs. Prior to seasonal adjustment, payrolls fell by 19.5 million. The Bureau of Labor Statistics uses a birth/death model to account for business creation and destruction. This model does well in normal circumstances, but tends to miss badly at turning points. The model would have added 246,000 to the unadjusted payroll total, but the BLS adjusted that to -553,000 to account for the effects of COVID-19. Annual benchmark revisions will eventually correct that, but why worry about the nearest million or so at this point.

Weekly jobless claims have been trending lower in recent weeks, but the level remains elevated. Over the seven weeks ending May 2, 33.5 million workers had filed a claim. The Labor Department’s seasonal adjustment is multiplicative, which exaggerates the headline figure. Prior to seasonal adjustment, 30.7 million filed claims (18.7% of the labor force, or more than one in six workers). There may be multiple filings, as some workers get tired of waiting and file again, but that is likely small. On the other hand, a lot of workers can’t file, so the headline figure tends to understate the amount of job losses.

The unemployment rate spiked to 14.7% in April. Furloughed individuals should be tallied as “unemployment on temporary layoff,” but a lot weren’t. Enough, according to the BLS, to reduce the unemployment rate by about five percentage points. In other words, the unemployment rate should have been reported closer to 20%. The unemployment rate for teenagers jumped to 31.9% (from 14.3 in March and 11.0% in February). The rate for young adults (aged 20-24) rose to 25.7% (from 8.7% in March and 6.4% in February). For prime-age workers (25-54), the rate rose to 12.8% (from 3.6% in March and 3.0% in February).

The weakness in the labor market was better reflected in the employment/population ratio, which fell to a record low of 51.3% (vs. 60.0% in March and 61.1% in February).

Average hourly earnings are lower in leisure & hospitality than in other industries (in February, $16.85 vs. $28.52 for the private sector as a whole). Hence, greater job losses in lower paying industries would boost the overall average. However, average wage gains picked up across a wide range of industries in April. It appears that lower-income workers fared the worst in general in April – not just in leisure & hospitality.

Many furloughed workers can expect to return to work at the economy opens up, but not all. The Payroll Protection Program, “recovery rebates,” and extended unemployment benefits should help to less the damage, but many will fall through the cracks and not every job will come back. There will be some permanent damage. How much is unclear.

Most of the economic data reports are backward-looking, but weekly jobless claims will remain the key real-time figure to watch. Claims have been coming down in recent weeks, but they have remained in the millions. Seeing claims falling a lot more would be a hopeful sign, but that may not happen anytime soon.

The opinions offered by Dr. Brown should be considered a part of your overall decision-making process. For more information about this report – to discuss how this outlook may affect your personal situation and/or to learn how this insight may be incorporated into your investment strategy – please contact your financial advisor or use the convenient Office Locator to find our office(s) nearest you today.

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates (RJA) at this date and are subject to change. Information has been obtained from sources considered reliable, but we do not guarantee that the foregoing report is accurate or complete. Other departments of RJA may have information which is not available to the Research Department about companies mentioned in this report. RJA or its affiliates may execute transactions in the securities mentioned in this report which may not be consistent with the report's conclusions. RJA may perform investment banking or other services for, or solicit investment banking business from, any company mentioned in this report. For institutional clients of the European Economic Area (EEA): This document (and any attachments or exhibits hereto) is intended only for EEA Institutional Clients or others to whom it may lawfully be submitted. There is no assurance that any of the trends mentioned will continue in the future. Past performance is not indicative of future results.

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Hank has over fifteen years of experience in the financial services industry. Prior to joining KIG, Hank worked with TIAA and Vanguard in multiple advisory roles. As a CERTIFIED FINANCIAL PLANNER™, he has extensive experience building and developing financial plans tailored specifically to his client’s needs. Hank is committed to building trusting and impactful relationships with KIG’s clients by providing thoughtful, sound, financial stewardship.

Hank earned a bachelor’s degree from the University of Pittsburgh where he majored in history and political science. He currently holds securities licenses Series 7,63, 65, as well as Life and Health Insurance licenses. Hank is registered in 9 states.

Hank is married to Andrea, his wife of eight years. They have two children, Mary and Beau. His interests outside of his family and career include snowboarding, baseball and improving his golf game.

Prior to joining KIG, Andrew was employed with Merrill Lynch. He has over eleven years of experience in the financial services industry. As a CERTIFIED FINANCIAL PLANNER™ professional, he works extensively with clients to fully understand their goals and priorities and then deliver personalized financial solutions tailored specifically to their needs. Andrew is committed to building meaningful and trusting relationships with each client by providing ongoing, sound financial stewardship, so that his clients and their families can feel secure during every stage of their life.

Andrew earned a Bachelor of Science in business administration with a major in finance and a minor in accounting from the University of Dayton. He currently holds securities licenses Series 7 and 66, as well as Life and Health Insurance licenses. Andrew is registered in 23 states.

Andrew was recently married and resides with Meredith in South Jersey. His hobbies include fitness, riding his road bike, traveling, and spending time with family and friends.

Maggie joined Kennedy Investment Group in August 2018. She is new to the financial services industry; however, she brings over fourteen years of experience in administration and hospitality to our team. Maggie provides administrative assistance to the entire team while helping to keep the front desk running smoothly.

Maggie earned a Bachelor of Arts in biology with an emphasis on physiology from Rutgers University.

Maggie resides in Mickleton, NJ with her husband and two dogs. In addition to her career, she enjoys traveling, crafting, sports and spending time with family and friends.

Chrissy joined KIG in September of 2013 and has over seventeen years of experience in the financial services industry, primarily focusing on servicing and processing annuity products. Chrissy’s responsibilities include processing incoming client requests, meeting preparation, client reporting, and assisting with day-to-day tasks within the office. She holds FINRA Series 6 and 63 registrations.

Chrissy resides in Medford, NJ with her husband and two sons, Dylan and Shane. She enjoys scrap booking and spending time with her family at the shore.

Jack W. Kennedy III is the President and CEO of Kennedy Investment Group and Kennedy Insurance Services. He also serves as Raymond James Branch Manager, Registered Principal, and Financial Planner. His professional certifications include: CERTIFIED FINANCIAL PLANNER™ professional and Accredited Asset Management Specialist. He currently holds securities license Series 7, 9, 10, 63 and 65, as well as Life, Health, Property, and Casualty Insurance licenses. Jack is registered in thirty-five states.

For the past twenty-six years, Jack has been successfully delivering wealth management plans and solutions to select businesses and families throughout the Northeast. He and his team are fully devoted to working with individuals and business owners to build solid wealth management plans in a culture of dedication and service that exceeds industry standards and expectations.

Jack earned a Bachelor degree from Rutgers University while studying prelaw. Jack currently serves as Chairman of the KIG Charitable Foundation Committee and is a Board Member of the Children’s Continuum of Care. He has earned membership into the Raymond James Financial Services, Inc. Chairman’s Council. Chairman’s Council honors are presented only to those financial advisors who have demonstrated an unparalleled commitment to personal service and professional integrity. Membership is based on prior fiscal year production, and re-qualification is required annually. Members of the Chairman’s Council represent the top echelon of the firm’s financial advisors, which is a privilege limited to a select few.

Jack is married to Lorrie, his wife of twenty-three years. They have three children: Jack, Reagan, and Taylor. His interests outside of family, career, and community include an appreciation for golf, travel, boating, wine making and art.

*Membership is based on prior fiscal year production. Re-qualification is required.

Denise has been an important part of the KIG team for the past fourteen years. As a part-time branch assistant, she is responsible for providing administrative assistance to the entire team. Denise uses her organizational skills to assist with scheduling, client requests, and keeping the office orderly and running smoothly.

Alex joined Kennedy Investment Group in September of 2015. While in her fifth year in the financial services industry, she also brings over twelve years of hospitality experience to our team, which strongly resonates with the KIG culture. Alex is responsible for facilitating incoming client requests, client preparation and reporting, coordinating events, assisting with marketing initiatives, as well as maintaining various other office responsibilities.

Alex earned a Bachelor of Science in marketing from Rutgers University School of Business, and is currently an active member of Mu Kappa Tau, the National Marketing Honor Society.

In addition to her career, Alex enjoys traveling, personal fitness, and spending quality time with family and friends.

Diane joined Kennedy Investment Group in November of 2015, bringing twenty-six years of financial services experience to our team. Diane processes incoming client requests, prepares client reports and events, and assists with meeting preparation and various administrative tasks within the office.

Diane earned her Associates Degree in computer science – information technology, from Rowan University at Gloucester County College.

Diane resides in East Greenwich, NJ, with her husband Hank and son Aaron.

Valerie has been in the financial services industry for over thirty-three years. She joined Jack Kennedy’s team in 1998 and has been an integral part of the KIG team since its inception in 2004. Valerie is the Executive Vice President and Chief Operations Officer of Kennedy Investment Group and holds securities licenses Series 7, 9, 10, 63 and 65.

Valerie works with Jack Kennedy, the President of KIG, and oversees the management of the Concierge Services Division. She is involved in all aspects of the client relationships including, but not limited to, appointment preparation, account reviews, processing trades, transfers, new accounts, and all related client service issues. She oversees all office operations, compliance, and management.

Valerie is responsible for accounting, payroll, the administration of the 401(k), hiring and training all support personnel, facilitation of the addition of satellite offices, and the monitoring of those operations. She also maintains and updates technology, and develops and implements the marketing calendar. Valerie continues to raise the bar and set a new standard for customer service. She takes full ownership of our client’s needs and concerns and is committed to delivering solutions.

Valerie earned a Bachelor of Science degree from Rutgers University. Prior to joining our team, Valerie was the Vice President of Summit Bank and served as the Regional Market Manager.

In addition to her career, Valerie enjoys living an active lifestyle and practices both Pilates and yoga. She is an avid reader, and enjoys art and travel.

Brian Dorflinger
Financial Advisor – RJFS

Brian has five years of experience in the financial services industry. Brian, a lifelong resident of Cedar Brook, Winslow Township, has always been involved in public service. As a former Winslow Township Police Officer and Financial Advisor, he is committed to assisting his clients to develop and obtain their financial goals.

Brian is licensed in five states and holds Life, Health, Variable, Property, and Casualty Insurance licenses. Brian earned a Bachelor’s degree in public administration from Fairleigh Dickinson University.

Brian is a Board Member and President Elect of the Berlin Rotary Club and also serves as Secretary for the Board of Directors of the Atco Lions Football and Cheerleading.

Brian has been married to his wife, Maureen, for nine years and they have two daughters, Rylee and Reese.